[Congressional Record Volume 146, Number 14 (Tuesday, February 15, 2000)]
[House]
[Page H376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE CBO REPORTS ON MEDICARE HMOs

  The SPEAKER pro tempore (Mr. Ose). Under the Speaker's announced 
policy of January 19, 1999, the gentleman from Iowa (Mr. Ganske) is 
recognized during morning hour debates for 5 minutes.
  Mr. GANSKE. Mr. Speaker, remember when we debated the Bipartisan 
Consensus Managed Care Reform Act here on the floor about 3 months ago, 
and the HMO industry said the sky will fall, the sky will fall; 
premiums will go out of site.
  We get the accurate answer, the accurate answer from the 
Congressional Budget Office, which has analyzed the bill which passed 
this floor by a vote of 275 to 151.
  What did the CBO say would be the cost? The CBO said that over 5 
years, the cost of premiums would go up 4.1 percent total. Now, this is 
important to understand.
  All my colleagues should listen. The HMO industry will say 4.1 
percent each year. Wrong. That is not what the CBO report says. In 
fact, I talked to a CBO staffer, Tom Bradley, last night and he said 
that in the first year there would be almost no effect. In the second, 
third, fourth and fifth years, premiums would go up about 1 percent 
over what they normally would be because of this legislation.
  To my friends who debated this liability issue so vigorously, who 
said liability will cost so much, well look at what the CBO said. The 
CBO said when it looked at the bipartisan consensus bill that the 
largest single coster was not liability. The largest single coster in 
our bill is the internal and external appeals process, at 1.3 percent. 
Why is that? Well, because they recognize that HMOs are inappropriately 
denying care and that if a patient has an opportunity to take that 
denial of care to an independent peer panel, that about 50 percent of 
the time they are going to overrule the denial of care by the HMO and 
provide one with the care that they deserve and is justified and is 
medically necessary.
  There is another reason why this report is so interesting, and that 
is that the CBO estimate for the Senate bill shows an increase of about 
1.3 percent over 4 years.
  Now some would say that is great. I would point out that that is a 
recognition that the Senate bill does almost nothing. It only covers 
about 43 million people. It does not cover the 160 million people that 
our bill covers, and it does not have an effective internal and 
external appeals process, because if one looks at the fine language in 
the Senate bill, it still says at the end of the day that an HMO can 
say whatever they want is medically necessary or is not. Whereas our 
bill, the bill that passed this House, addresses that issue.
  Mr. Speaker, I would advise Members to look at this; but to remember 
this, that when they look at that 4.1 percent, it is cumulative over 5 
years. That, in effect, is about the cost to the average consumer of 
one Big Mac per month. That is what we are talking about in terms of 
the cost, not an excessive amount for people to know that all that 
money they are currently spending on their health care premiums will 
actually mean something if they get sick.
  Mr. Speaker, I just briefly wanted to mention a report by the 
Inspector General for Medicare. She looked at Medicare HMOs. We are all 
concerned about fraud and abuse. This is what the Inspector General 
found that Medicare HMOs are charging the Federal Government for: 
$250,000 in meetings for gifts, food, alcoholic beverages, at only one 
HMO; $190,000 for a sales award meeting in Puerto Rico for one Medicare 
HMO; $160,000 for a party celebrating a Medicare HMO's parent company's 
150th anniversary; $25,000 for leasing a luxury box suite at a 
professional sports arena by a Medicare HMO; $106,000 for sporting 
events and theater tickets at four Medicare HMOs; $70,000 for holiday 
parties at three Medicare HMOs; $37,000 for wine, gifts, flowers, gift 
certificates, insurance brokers and employees at one Medicare HMO; 
$3,000 for a massage therapist for an employee at one Medicare HMO.
  When the HMOs say that they are really hurting and that we need to 
increase their Federal dollars, maybe we ought to ask them, gee, maybe 
the tension is so much that they will need that massage therapist.

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